Team News Riveting
New Delhi, August 19
The centre has relaxed the norm for extending loan to the stressed power distribution companies (discoms).
The Union Cabinet approved one-time relaxation to Power Finance Corporation and Rural Electrification Corporation for extending loans to discoms above limits of working capital of 25 percent of last year’s revenues, Union Minister Prakash Javadekar said.
The loan would be disbursed under the Ujwal DISCOM Assurance Yojana.
The union government had on May 13 decided to make an infusion of liquidity of Rs 90,000 crore through Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) as a part of the ”Atmanirbhar Bharat Abhiyan”. Under the intervention, REC and PFC would extend special long-term transition loans up to 10 years to DISCOMs.
By the end of July 2020, 67 percent of loans were sanctioned to various state discoms by the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) as a part of the Rs 90,000 crore liquidity injection to the state discoms in the form of state guaranteed loans (to be equally funded by PFC and REC) under the special economic package announced by the central government in May.
Among the states that are availing state guaranteed loans under the liquidity infusion package, Uttar Pradesh’s discoms have sought the highest quantum of loans from PFC and REC at around Rs 21,000 crore. The other major borrower is Telangana which has reportedly sought loans of Rs 12,000 core. Karnataka, Andhra Pradesh, Maharashtra, Punjab, Rajasthan and Jammu & Kashmir are some other state discoms that have reportedly sought loans under the liquidity package
The package for power sector would significantly reduce the burden of discoms for maintaining distribution of electricity as supplied by generation and transmission companies during the crises.
